Intangible Assets Explained: Amortization, Goodwill and Depletion

A restaurant's building, fryers and freezers are worth less than the NAME above the door — and that name is an asset too. This video puts a number on everything you cannot drive, cannot touch, and cannot point at. Chapter 10 has been about assets you can walk up to. Tonight is everything else: the gravel that empties out of a quarry, the patent that expires, the brand that never does, and the goodwill a company can never create for itself no matter how good it gets. One idea runs underneath all of it, and you already own it from Part 2 — spread the cost across the years it earns. Only the name of the expense changes. Every figure is derived on screen, formula first, then the numbers. IN THIS VIDEO • DEPLETION — natural resources: the rate per ton, the expense, and the contra account that behaves exactly like accumulated depreciation • The one fork that decides everything about an intangible: does it DIE, or doesn't it? • AMORTIZATION of a limited-life intangible — straight-line over the SHORTER of legal life and useful life, and why it is almost always the shorter one • The trap almost everyone falls into: what you credit on an amortization entry, and the account name that must never appear • A patent, a franchise and a copyright worked end to end — three intangibles, three lives, one formula • TRADEMARKS and other indefinite-life intangibles: no amortization at all, impairment tested once a year • GOODWILL — price paid minus the fair value of the identifiable net assets, and why it only ever arrives in a purchase • RESEARCH AND DEVELOPMENT — the rule that feels unfair: buy it and it is an asset, build the identical thing yourself and you expense every dollar • Where all of it PRINTS: plant assets and intangibles on the face of the balance sheet, and where the expenses sit on the income statement • FIXED ASSET TURNOVER — the one ratio that asks whether any of it was worth buying, and the only fair way to compare it • The Chapter 10 intangibles card, built to be screenshotted ⭐ Free chapter notes, practice exercises, mock exams and a quiz generator for every chapter: https://appliedanalyst.com PREREQUISITE: Part 2 builds the idea this whole video runs on — spreading a cost across the years an asset earns. Everything here is that same idea wearing different names. NEXT: the Chapter 10 recap — every concept and formula from all four parts, in one pass. CHAPTERS 0:00 The sign is worth more than the building 1:06 Where you are in Chapter 10 2:05 One sentence, three names 2:50 What a natural resource actually is 3:31 Birchwood Gravel 4:01 Step one — the depletion rate 4:34 Step two — the expense, and the entry 5:22 The fork — does it die? 6:10 The patent, worked end to end 6:54 The entry, and the trap 7:34 The franchise and the copyright 8:04 The trademark — where the schedule stops 8:40 Goodwill — the one you cannot create 9:50 Research and development 10:31 Your turn — which ones die? 11:07 On the balance sheet 12:06 Intangibles on the face 12:52 Was any of it worth buying? 13:55 The Chapter 10 card 14:42 What is left of Chapter 10 ━━━━━━━━━━━━━━━━━━━━━━ The Applied Analyst — Learn the concepts. Understand the numbers. Become the analyst. Free, structured accounting and finance education. No memorizing, no hand-waving — every number gets derived in front of you. 🟢 FREE NOW — Accounting 1, the full nine-chapter course: lessons, notes, practice exercises, flashcards and full mock exams, at your pace. 📚 COMING — financial statement analysis, corporate finance, and professional exam prep (CFA, CMA). ▶️ Start free: https://appliedanalyst.com 𝕏 @Appliedanalyst Educational content only — not financial advice. ━━━━━━━━━━━━━━━━━━━━━━